I agree with SSRI too. I had an alert on it to buy at 8.88 but Schwab is so slow in getting the email to you that it had already gone back to around 9.50 by the time the email came through.... There will be opportunities to add to all of these over the next few weeks while we get rhetoric from fed heads and a couple more small sell offs in gold when decent retail sales numbers etc. are released. If that doesn't pan out, I have a fairly big position in HMY which I just bought over the past couple days. HMY is another with end of life mine concerns. They all have EOL concerns, mainly because capex has been cut to the bone over the past few years. Once gold hits 1400, a lot of existing mines will be extended.
If it's a suckers bet for the option purchasing it, then it stands to reason that it's a good deal for the option issuer - right? Again, I believe selling options is as close to a free lunch as you will find in this game. You're basically an insurance salesman and the premiums can be quite large.
Selling options is the closest thing to a "free lunch" you will ever get on Wall street. It's not something I have done for a while but this looks like a very good straddle. Only advice I would offer to any newbies is do not sell naked calls on a stock like IAG or any other small cap. I did it a few years ago and boy was that a nasty experience!
IMO, this is desperate bulls who have not been in the miners at all and they're behaving like a kid in a cake shop with a pocket full of dollars..... I believe that the pro's will be looking for the lows of today to add to their positions and I think they will be waiting for lower prices as we get into the June meeting, before they really pile in to the miners with large, long term positions.
Shoot.... I was in a meeting when my targets were met at the open..... HMY low of 3.16 and SSRI 8.78. Darn it..... Those lows will probably be tested though.
I am sure it is. However, in terms of 'correction', I am certainly looking for more than the textbook catchall 10% on IAG. I'll see where its at with 1250 gold. Probablty will not be where I am willing to buy, which is somewhere in the 3.15 range. We will see. I just bought some HMY.
I agree.... The market assigned a 10% chance of a rate hike prior to the minutes..... Now 30%. I think it was closer to 50/50 before the minutes, but what do I know.....
That is what I was thinking..... Preferably, Yellen would rather not hike until Hillary is elected, but they have to at least appear to be apolitical..... So yes, "get it out of the way", stocks go down, dollar goes up, oil goes down, then they get to save the world for the rest of the year and the stock market gets to a new all time high in time for the general election.
Gold shouldn't take a huge hit on this hawkish intent though.... Look at what happened last time the fed funds rate was actually raised. This dip in gold will likely be the catalyst for the move to 1400 around end of year/new year. Get your shopping list ready if you're not all in.
They're testing the waters..... If s&p doesn't crash between now and June, after their hawkish comments, they risk a 0.25 increase in June (let's face it, they're running out of 2016 meetings). Problem is, no one believes them any longer, so the market may hold up until the actual rate increase takes place..... If econ numbers improve in the next few weeks, they will probably hike.
If IAG issue flow through shares at $4, any short term loss in pps due to shareholders selling on dilution will be short lived, unless it's a huge amount. Westwood is going to cost a lot to fix and boto needs to be developed. They have to increase production sooner rather than later otherwise it will be down, YOY, beyond 2018. It's all about how wisely they put the equity to work. Of course, too much dilution causes too little leverage (to the gold price) so again, if we're talking about 10M shares, that would be a concern. Last time it was only 5M. If it's more than 10M, the concern is that they're never gonna make a EPS profit at this rate!
I think that's pretty good advice..... and yes, I certainly do remember when gold would go up and IAG would go nowhere.... I suppose, if funds are getting in, they're not worried about a few cents in the particular mining stock price and they're not even concerned about 50 bucks in pog it seems. They are probably just figuring 1400 gold means they get a double from here.
I mentioned a few days ago that I was bullish again on HMY because of the built in currency hedge. That is certainly panning out. HMY is green today with gold down 7. Not surprising when you consider how far the rand has dropped in the past week - 7%!!! I am still not chasing any miners but HMY is my main target at the moment.
Sorry I meant "at 3.18". It's not going into the 2's. Also, I am expecting the dollar to keep bouncing a little higher and that will limit the downside for HMY as the Rand weakens. It's already weakened quite a bit since it bounced (a major reason why HMY is nowhere near it's 52 wk high).
Right. If gold went up to 1400 tomorrow morning, the profit margin on AISC/POG would be a lot closer to 100% than it is at 1300.
CDE has a history of diluting shareholder value. I am not opposed to dilution in principal but a company that uses its equity as a no holds barred money machine is not the kind of company I like for a long term hold. Good for trading though.
Every dollar over AISC for which they sell an oz of gold does not make it to the bottom line eps. Your math is a good starting point but you have to take into account non sustaining capex etc. if you're figuring out an eps number.
HMY is at a fair price right now. I have a buy order in right now for a few shares at 3.33. I'd like to load up the truck around 2.18. There are a number of reasons why HMY is lagging (Many mines close to EOL, production is down 9% this Q, doubts as to whether they can fund Golpu, SA is looking a bit unstable right now and I don't think they helped the pps by going on to a 6 mth reporting period). There are positives too though. I think it's better 'value' than IAG right now but it's trading very volatile.
The tiny SSRI float gives it a lot of leverage. Waiting for a pullback but I'm not expecting a bargain basement price. I don't some math on SSRI the other day and if POG gets to 1400 (I think it will get there within 6 months or so) it will get very close to $20. Right now, I think it's fairly valued.